The EU AI Act is a groundbreaking legislation that establishes a risk-based tiered system for categorizing and regulating AI systems in the European Union. The act prohibits high-risk AI systems, which include those with significant potential for manipulation or harm to individuals, while providing clear directives for achieving compliance among general-purpose AI systems. Companies must prepare for the requirements of the EU AI Act by implementing human oversight and control measures, technical robustness solutions, privacy and data governance practices, security measures, transparency protocols, diversity and non-discrimination guidelines, and social and environmental well-being initiatives. Non-compliance with the act carries hefty penalties, making it a strategic imperative for companies utilizing AI systems.